Since Mexico nationalized its oil industry in 1938, state-run Petroleos Mexicanos has been responsible for the country’s oil exploration. In a turn of events triggered by an ailing industry, and for the first time since then, a private company has sunk a new offshore oil well in Mexican Waters. This undertaking is meant to boost recovery and aid the country’s drive in admitting foreign competitors back into the energy markets.
Located in Sureste Basin off Tabasco, the Zama-1 well holds an estimated 100 million to 500 million barrels of crude oil. The joint venture between Premier Oil Plc., Talo’s Energy LLC and the country’s Sierra Oil & Gas started drilling the well in May. This partnership is the first offshore exploration in the last almost 80 years that has not been initiated by the state monopoly.
The drilling process is expected to take 90 days at a cost or $16 million. After Mexico voted to open its oil industry to private investors in 2015, the three companies won the rights to the prospect in the first round of bidding.
Elaine Reynolds, a London-based analyst at Edison Investment Research Limited, notes that this well will be observed keenly by the industry given that it is part of the country’s energy reform process. According to a statement by Premier, Talos owns a 35 percent stake in the venture and is the operator of the oil. Premier holds 25 percent while Sierra holds 40 percent.
About Talos Oil
Talos Energy LLC is a privately held gas and oil company based in Houston. In 2013, its wholly owned subsidiary completed the acquisition of Energy Resource Technology GOM, Inc. The latter was the gas and oil subsidiary of Helix Energy Solutions Group. The Energy Resource Technology had assets in Mexico. Following this transaction, Talos became the first foreign operator to venture in Mexico since 1938.
Talos Energy focuses on acquisition and exploration of oil and gas properties. It is a portfolio company of funds affiliated with Riverstone Holdings LLC and Apollo Global Management. Their priority is in the Gulf Coast and the Gulf of Mexico.
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